A. If an employer pays contributions on behalf of any person who is not eligible by statute or rule for ASRS membership or pays contributions on compensation that is not eligible by statute or rule for ASRS contributions and either ASRS or a court determines that ASRS shall provide a person with any benefit or credit under this article or article 2.1 of this chapter based on such contributions, the employer shall pay to ASRS any unfunded liability resulting from the provision of benefits or credit to the person.

Terms Used In Arizona Laws 38-748

  • ASRS: means the Arizona state retirement system established by this article. See Arizona Laws 38-711
  • Compensation: means :

    (a) For members whose membership began on or before December 31, 2019, the gross amount paid to a member by an employer as salary or wages, including amounts that are subject to deferred compensation or tax shelter agreements, for services rendered to or for an employer, or that would have been paid to the member except for the member's election or a legal requirement that all or part of the gross amount be used for other purposes, but does not include amounts paid in excess of compensation limits established in section 38-746. See Arizona Laws 38-711

  • Credited service: means , subject to section 38-739, the number of years standing to the member's credit on the books of ASRS during which the member made the required contributions. See Arizona Laws 38-711
  • Employer: means :

    (a) This state. See Arizona Laws 38-711

  • Interest: means the assumed actuarial investment earnings rate approved by the board. See Arizona Laws 38-711
  • Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
  • Person: includes a corporation, company, partnership, firm, association or society, as well as a natural person. See Arizona Laws 1-215
  • Statute: A law passed by a legislature.

B. If the employer does not remit full payment of the unfunded liability pursuant to subsection A of this section within ninety days after being notified by ASRS of the amount due, the unpaid amount accrues interest until the amount is paid in full.

C. Credited service ceases to accrue as of the date that ASRS or a court first determines that ASRS shall provide any benefit or credit to the person.

D. If the amount in the person’s ASRS account is greater than the present value of the benefit or credit, ASRS shall retain the entire account and is not required to refund, credit or offset any excess against future contributions.

E. This section applies to an employer that employs, either directly or indirectly, a person who performs services for a third-party organization and that does not have a written representation by ASRS of the person’s eligibility.

F. For the purposes of this section:

1. "Amount in the person’s ASRS account" means two times the person’s retirement contributions made pursuant to section 38-736:

(a) Plus:

(i) Interest on the person’s retirement contributions made pursuant to section 38-736.

(ii) Any contributions made for the purchase of service credits pursuant to section 38-742, 38-743, 38-744 or 38-745.

(iii) Interest on the amount contributed for the purchase of service credits pursuant to section 38-742, 38-743, 38-744 or 38-745.

(b) Minus any amounts paid by ASRS pursuant to this article or article 2.1 of this chapter.

2. "Interest" means the interest rate assumption that is approved by ASRS for actuarial equivalency.

3. "Unfunded liability" means:

(a) For a person who is not eligible by statute or rule for ASRS membership, the amount, if any, that the present value of the person’s benefit or credit, using the actuarial assumptions approved by ASRS, exceeds the amount in the person’s ASRS account calculated as of the date that ASRS or a court first determines that ASRS shall provide any benefit or credit to the person.

(b) For contributions on compensation that is not eligible by statute or rule for ASRS contributions, the difference, if any, of the amount that the present value of a person’s benefit or credit, using the actuarial assumptions approved by ASRS, exceeds the amount of the present value of the benefit or credit the person would receive if the ineligible contributions, and the compensation and credit associated with those ineligible contributions, had not been reported to ASRS and the amount in the person’s ASRS account that is associated with the ineligible contributions on compensation.

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